Disrupting the beauty industry, out of Malaysia

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By Lum Ka Kay | Feb 10, 2016

Online marketplaces a proven business model in US and Europe

In Rocket Internet, execution is everything

PAWEL Netreba left his job at Rocket Internet-backed foodpanda so that he could build his own startup, guided by nothing more than a desire to disrupt a traditional industry, and thereby reduce its market inefficiency.

“I wanted to build my own startup, and I was thinking of what I could do to help solve a problem.

“And the way to do that is by building a marketplace – I personally believe in online marketplaces as they can help reduce market inefficiencies and disrupt traditional industries.

“And I have experiences in building marketplaces,” he says, speaking to Digital News Asia (DNA) in Kuala Lumpur recently, adding that no matter the industry, a marketplace is essentially about supply and demand.

Netreba is the founder and chief executive officer of Kuala Lumpur-based beauty and wellness startup Bfab, an online marketplace that allows users to book beauty services.

Before Bfab, Netreba was the cofounder and managing director of foodpanda in Russia and the CIS (Commonwealth of Independent States) for about a year, before being stationed in Malaysia for five months as vice president of global business development after foodpanda’s acquisition of Room Service in February 2015.

It was during his tenure in Malaysia that he decided to start his own business, right here in Kuala Lumpur.

“I realised that Malaysia is a good place to found my own startup. Malaysia has a good market size – the Klang Valley alone has a population of eight to nine million.

“There is good spending power, good salon brands, a vibrant startup ecosystem, a good talent pool, and most importantly, a reasonable cost of living,” he says.

While Netreba had ideas about disrupting industries, for his cofounder and Bfab chief commercial officer Raeesa Sya, it was more about joining a strong team in order to learn more of what it takes to become an entrepreneur.

Before Bfab, Sya had founded her own startup as well, Lulu.my, which she describes as a “service provider for beauty services.”

“Seven months down the road after I founded Lulu back in early 2015, things got tougher as I was the only founder.

“In the midst of searching for a cofounder I found Pawel (Netreba), so I exited Lulu and went full-time with Bfab,” she says.

According to Sya, Lulu.my was acquired by HMH Technologies Sdn Bhd in November 2015.

“Lulu could’ve been great, but it was going to take a long time as I was alone. And I think there’s still a lot for me to learn.

“So I was weighing whether I wanted to do things on my own, or join a stronger team.

“At the end of the day, it’s better to join a team where others can share the workload and are responsible for different aspects,” she says.

As chief commercial officer, Sya is responsible for developing strategic partnerships and branding. Besides Bfab, she also owns a design agency that specialises in branding and digital media.

It was a match made in supply-and-demand heaven, because Netreba was looking for a cofounder who could help him with branding and public relations (PR).

“Plus, our target audience is predominantly women, so we were also looking for someone who could provide us some insights from the female perspective.

“A common friend of us introduced me to her [Sya], and here she is,” he says.

Offline-driven industry

But why the beauty and wellness industry?

Netreba says it all goes back to the idea of wanting to reduce market inefficiency by bringing traditional businesses online.

“We were looking at the marketplaces that were already out there, and we found out something about the beauty industry in Malaysia.

“It’s a big industry, yet it’s very offline-driven. It is also very fragmented. And many beauty salons are struggling to survive as competition is really tight.

“My analysis was that there is an oversupply of beauty salons, and they are fighting for customers. It’s a growing industry and everyone needs beauty services, so I was thinking a marketplace, in this case, would work very well.

“By creating an online presence for these beauty salons, customers will get to know about them, and this means more customers for the beauty salons,” he says.

Netreba concedes that Bfab’s business model is not a unique one – it has been proven with US-based StyleSeat and Europe-based TreatWell (formerly known as Wahanda).

“If this can work in Europe and the United States, why not South-East Asia?” he quips.

All about execution

Netreba tells DNA that the most important lesson he picked up from being a part of a Rocket Internet-backed startup was fast execution.

“In Rocket Internet, it’s all about execution. And my favourite phase is, ‘You can plan, strategise and have everything laid out, but in the end it’s down to execution.’

“And the key here is that you have to execute fast so that you can gain an advantage ahead of your competitors,” he says.

Meanwhile, having been part of foodpanda specifically taught him people management skills.

“With Rocket Internet, I had to the chance to lead bigger teams, how to monitor performance and drive the team further,” he says.

For Sya however, managing people is tricky. “You have to be stricter with hiring, instead of just having someone there,” she says.

In the end it’s business, says Netreba. “As a leader, a founder and an entrepreneur, you have to make decisions based on what’s best for the company.

“It’s not easy, but you’ll have to pull the trigger – sooner rather than later,” he says, when asked what he would do if he hired the wrong person.

Last but not least, Netreba says it is about building traction among users and merchants, which is what Bfab is currently focused on.

“Over the past month, we saw good traction and response from the public – many are returning customers, and many bookings are coming in.

“And for now, we’re focused on working to push Bfab out, and creating brand awareness,” he says, declining to give specifics.